The pound continued its winning streak yesterday, up nearly a cent from the beginning of this week. With Boris Johnson giving the green light to the controversial HS2 rail network and promises of further investment within UK infrastructure, analysts have seen the boost of fiscal policy enough to support the currency. By loosening the purse strings and going ahead, the project should encourage a domino effect of jobs and spending. One of the big selling points of the project is to distribute wealth across the cities of the UK.
Yesterday’s GBP result showed the market consensus was correct and the economy made no growth in the final quarter of the year. Although month-on-month, the economy did grow more than expected, quite possible down to the general election boost increasing confidence that followed. This was enough to push GBPUSD towards 1.30 and hold GBPEUR above 1.18.
EURUSD has touched a fresh four-month low. This comes as there are questions on the health of the European economy and predictions that a recession could be on the horizon for the Eurozone.
There was big news from New Zealand in the early hours of GMT, as the Reserve Bank of New Zealand held firm on their interest rates. Although this was anticipated, the press conference that followed where they moved from their bearish stance and predicted that there would be no interest rate movement this year, was not.
Have a great day.
Author: Jack Nicholls, Relationship Manager
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